han. back to school. good morning, this is bloomberg "surveillance," live from new york. thursday, august 7, i am tom keene. joining me is scarlet fu and brendan greeley. adam johnson is on assignment. our morning brief, negative yields. >> that is not the overnight development. the development was data that contributed to that -- german thantrial output grew less expected. australia, the jobless rate jumped to a 12 year high at 6.4 %. surpassing the u.s. level. >> maybe even china, that links into china. >> it is a resource story. >> it points to the appeal of

rescinding the carbon laws. ., data in the u.s., 8:30 a.m u.s. jobless claims. the bloomberg consumer comfort number at 9:45 a.m. p.m., the consumer credit number four june. earnings, before the bell, wendy's, duke energy, and amc. bell, news corporation, not 21st century foxconn with the unit that owns "the wall street journal." >> i can't keep track of the names. >> it is "the wall street journal," essentially. news corp. 19th-century? >> this is what rupert murdoch loves. >> maybe newspapers can make money on their own. >> with a pay wall. cbs, lions gate, and solarcity

as well. bank of england comes out with its rate decision at 7:00 a.m., ecb comes out at 7:45. of the important out press conference for governor mario draghi. that will be a remarkable press conference. a data check. stocks, bonds, currencies, commodities. futures bounce after a tough number of days. interesting to see how the equity markets in the u.s. react after what we healed from frankfurt. oil south of $97. vix, 16.37. german 10 year, contrast that with our 2.46%. 36 with news on ukraine. brendan greeley, help me out. u.s., hereame as the

is their yield below 2%. >> red circle is the u.s. yield? >> yes. what a differential here, two different economies. >> is the continuation of the story we have seen in europe for the last four years, germany has been a huge part of sending other capital to the periphery. place. is still a safe it gets the brain drain from spain and bulgaria, straight to berlin. bund.ave safety in the they are part of the problem and also the biggest winner. >> they are the full faith and credit. us ino gallo will join the 8:00 hour. let's look at the front page. bank of america on the verge of a record-setting settlement in the mortgage backed securities case. bofa will pay anywhere from $60 $17ion to -- $16 million to

end the government investigation. bofa have been trying to negotiate down the $17 billion number that was focused on. uggla the new york times" has a back story. >> "the bank's top lawyers and executives," you have to assume "who made the ill-fated decision to fight judge raykoff." leverage was eroded after they lost that case. there are different numbers in operating income.

360 nine daysa, of present operating income. jpmorgan, 204 days. gorgeous chart. citi, 161 days. view"hought "bloomberg had a good point. they wrote it is a shame that these cases do not go to trial. what we would get is understanding of how the bank works internally. >> they do not want us to know. useful for future regulations, we don't have it. we have a settlement, they write it off, the shareholders take a bath and we don't get anything out of it. >> is a secret how "surveillance" puts it together. day, i will explain it. i am a mole inside "surveillance." >> russia striking back against u.s. and eu sanctions over ukraine. putin announcing food imports that will be banned for one year. on them -- among them, cheese, pork, fruit,

vegetables, and dairy. food from countries that have supported the sanctions like canada and norway. >> this is not funny but sometimes putin does things that feels like putin's pride. when he goes on vacations and get pictures taken with white tigers or shirtless. -o-d-k-a, i do not see it in there. >> they do not need imports of vodka. >> the first idea of germany, is some of the slowdown in italy because it is the initial -- >> there is concern that will be a drag going forward. adidas seeing a hit from sales in russia. >> what else? story,third front-page

concern over deflation in europe. you showed us the 10 year yield of the german bund. the two-year yield falls below zero today, negative right now. the catalyst, industrial output grew less than expected. tension increasing over ukraine, people are stampeding to the safe haven of german bunds. >> i have to bang this gong again. it is the long-term consequence of the fact that germany did not have to bail out its own banks. was filled out by irish taxpayers. >> really? help me here. banks notout weak doing what we have the courage in the u.s. to do, or is about lousy economy, or both? >> i always make this germany's

fault. it is about taking too long to understand that the problem was not with the banks, but with the economy. germany has been obsessed with austerity. it is realizing now it has to help other economies. this morning, mario draghi press conference. we will have that later. >> those are our front-page stories. >> our guest host for the hour id. looking forward to this, ceo of wsl strategic resource. forget back-to-school. exist in the winter and end of the spring? >> it is almost as if every store in america closed. >> has summer been ok? 75% off. >> that is what is happening.

i got an e-mail about a sale, it is only 80% off. >> is this permanent? >> it is permanent and a sense that entrenched shoppers saying i'm not going to overpay for anything. i'm going to check the deals. unless you have something really new and different, i will come. how toilers have learned gain that, they adapt accordingly. who is coming out the best? >> we have a new series of managers running big retail companies. walmart and target, the discounters, are now very focused on the best deals. uniqlo and h&m are in a good place. high-end, luxury brands are struggling. &m --t's stick with h

>> cheap and cheerful. >> they are getting traffic. >> it is about young people, middle-aged people, kids. that's the starting point for people. >> is a mix and match going on? >> high-low? >> even the wealthy are saying i am stupid to pay $300 for a white t-shirt. i might as well go to h&m. >> how much? >> some people will pay $300. >> kanye. >> cheaper bowties. >> it was like $7. >> tom, you overpaid. >> come on! $100 t-shirt. there we go. $300 ifpeople will pay

it is the right brand name. not us. >> i am going shopping after the program. >> goto company news. >> some company news headlines, boeing wants to cash in on aviation junkyards. they might be in the market for a salvage company that recycles jet engines and other components. airlines are getting rid of old planes to be broken up four parts. the world's largest food company will spend almost $9 billion buying back shares, the first in years. the maker of nespresso reported growth that beat estimates. to newlosing a battle york's explorers club. stop selling a brand of scotch called "johnnie walker explorers club." diageo says it will appeal. the club's former members

include neil armstrong. >> coming up, thomas mueller wears adidas. important german soccer player. adidas coming off of its world cup success is having some problems. we will talk about that, after the break. ♪

>> good morning, bloomberg "surveillance." evercore phas merged with isi. altman making a transaction. "in the loop," look for ralph schlosstein of

evercore. this is bloomberg "surveillance," scarlet fu and brendan greeley. >> adidas reported results come a preannounced bad second quarter numbers. the profit margin outlook missed estimates. the golf business not doing so well. adidas relies on russia. i had no idea, 13% of sales overall. marketing expenses, when you're up against nike, you have to spend a lot. the company that spends like there is no tomorrow on ads. >> is not just marketing. it is sponsoring teams. >> they did very well in the world cup. >> but then the sponsoring does not end in the world cup. we are talking about european leagues, english premier leagues. adidas has an advantage but it is very expensive. they just took over the contract from manchester united, $94

million. unprecedented amounts of money being spent at the club level. i spent all summer boring you guys about adidas' soccer. adidas has a lot of other brands and a problem that comes up at earning calls is the golf brand. millenials are not playing golf. >> nike also has golf, it is operated nike -- all branded nike. >> has the swoosh. adidas has brands, nike is so consistent worldwide. ,> wendy liebmann of wsl branding is key. >> nike has always been so consistent. foras always been one brand performance, fashion. adidas has chopped and changed it for different countries and different sports. >> as an aside, is nike the apple computer of retailing? analogy.s a fair

they have continually pushed innovation and design. >> i think nike does offense that apple can only dream of. >> you've gone to all of them. ologyke was called a fash- company, a fashion technology company. >> if you and i said that, we would get punched. >> i think it comes more from performance. dicede it is sliced and into different brands, the challenges it is harder to get the global power of the brand. >> one bright spot for adidas is reebok brand has invested in crossfit. they are sponsoring the crossfit games and have crossfit g ear, sponsoring athletes. part of that is a wider trend towards fitness specific gear. have you seen in a trick broadly, not just around

crossfit? >> we have done research about the wellness uprising. at all levels in the u.s. economy -- >> the wellness uprising? >> people walking around in workout clothes. >> trying to be healthier in eating. that has an impact. people trying to be healthier. that is in everyday clothing or exercise clothing. >> she's looking at you, tom. >> does this change marketing strategies, it is not just about getting athletes? it is about taking a walk every day. how does that change retail? >> for a retailer, that opens the doors. derek jeter is the icon, then, how does everybody aspire to doing a little better every day? cheese, alk, healthy vegetable. scarlet?hat,

>> we will do the rest of the show walking. tom is scowling. the next hour of bloomberg "surveillance," robert kaplan, former goldman sachs vice chairman will be joining us as guest host. this is bloomberg "surveillance" on bloomberg television, streaming on your tablet, smartphone, and bloomberg.com. ♪

>> good morning, futures up 5. i am tom keene, with me is scarlet fu and brendan greeley. adam johnson is on assignment. top headlines. know what, weyou

will start with the 30 million americans who lack health care. a finell not pay under the affordable care act in 2016 is a list of exemptions including domestic violence, property damage from a fire or flood, or having a canceled insurance plan. government researchers racing to get an exponential drug approved to fight ebola. the world's worst ebola outbreak is being blamed for west africa.hs in in cambodia, senior members of the khmer rouge have been sentenced for war crimes. the first time top officials have been punished. those are your top headlines. >> good. brendan greeley gets us started with a morning must read. >> blog post by a tech ceo.

"why i am leaving the best job i ever had." he is taking a lesser role at his own company. he wants to spend more time with his family. >> that's not the excuse? >> that is what he is planning to do. >> is he a millennial? >> i have this problem, too. we spent 30 years fighting the wars have, the daddy just begun. there is not cultural acceptance that you want to go home and spend time with your kids. >> what are you doing? >> losing the daddy war. >> he's a ceo. these discussions about the quality are wrapped around elite corporate officers. wsl, i ammann of

more interested in the retail worker barely making it who has these same challenges. they do not have the option out of a ceo. >> they are grateful to have a job, it is not a great paying job. they do not always have health coverage. now, fortunately, some of them do. it is a real challenge and they are the ones who will spend if we give them more money. excuse my political -- >> can you make the statement that because of the new health care directives in the u.s., retail is going to more part-time help? >> i cannot but i have heard those conversations. i cannot make a blanket statement. >> there has not been a good study yet. >> not yet. >> to your morning must read, it is a bunch of elites going out, i think i will take off. let stock options kick in. >> there is a distinction between the elites and non-elites. yesterday we were talking about

extrinsic and intrinsic motivation. intrinsic motivation is important for the elites. they want to show that they have a point to their lives and jobs. talking about retailer workers, extrinsic stuff is important. we talk about how to make sure you have a company culture, for a majority of workers, just pay people more. >> pay them more so they can have a better quality of life, whatever that looks like. >> we will continue discussing this. a topic that does not go away. back to school shopping season n begins. the state of the consumer and company's posture feet response. ♪

>> good morning, that view is better than this in europe. europe is troubled by recession in italy and low interest rates.

we will have the bank of england and ecb rates from a gorgeous new york city this thursday, april 7. i cannot convey the difference in december versus the summers we have seen. a perfect sunrise above a perfect new york city. this is bloomberg "surveillance," i am tom keene. with me, scarlet fu, brendan greeley. adam johnson is on assignment. a quick data check. a standard data check. future coat up, 10 year yield, the euro does not describe what is going on in europe. morning, negative two year yields in germany before mario draghi and ecb festivities. we will have that for you in our next hour. >> let's talk about retail, the second half of the year is critical. third and fourth quarter include back to school and the holiday shopping season. for back-to-school, according to the national retail federation, americans will spend almost $75 billion on school and college

items. our guest host is wendy liebmann , ceo of wsl strategic retail. you put together a regular surveys and your surveys and reporting shows that shoppers are willing to spend again but they are spending smart. what are companies doing to get ahead of this? to make sure people spend a little bit more than they are willing to? >> they are getting out early, that sounds like old news. they are getting out early in lots of social media and promotions, how do i connect with people and connect with them personally? how do i make sure my product is on their list. social is outpush in strong. deals, new products, reminding people of what they need to buy. things.nds of just getting people go in earlier rather than waiting until the very end. >> going earlier, a lot of people i talk to will say that they head out to staples for school supplies. does brick and mortar hold any advantage for back-to-school

shopping? yes.r certain things, sometimes it is easier to walk into staples or walmart and get all those things done under one roof. at the same time, i have two kids and a cart, that makes it a challenge. withwill kill two birds one stone. the marginal economics of back-to-school, $4 makes a difference at walmart. the backpack, $26.99. brendan greeley, the "frozen" backpack with matching lunchbox, elsa and anna, $4 more. are not a" backpacks substitution good. i have two four-year-old girls. allouse is all "frozen," the time. with the success of disney and pixar, how important is branded gear in a time when people are

aware of how much they are paying? it does cost more to get elsa on the short, i know. >> it is very important. otherwise i am picking the lowest price. when you have 24-year-old saying daddy, i want "frozen." if you can afford to, you will go for "frozen." throughen will blow bargain shopping. >> compare with the holiday season? >> it is much less important. it is a precursor to how people are feeling. i have got to buy, get them sneakers, jeans, a backpack. i've got to do it. in general, people are not buying everything at once. they are buying gradually as they go into the season. it is a different kind of season. >> you say it is less important, it seems like it is a lot more

expensive than it used to be. when i was growing up, it was apparel and sports quitman, maybe staples. now, it includes a lot more categories. is there any industry that does not get a boost from back-to-school? >> very few. a really good point. everything from beauty products, technology, home goods. all of those things. really smart retailers take advantage of that. >> wait, wait. -- tooing to sit foephora sephora? >> yes. and you're buying school supplies, parents have to buy clorox wipes. >> and a teenage girl is saying what color lipstick to wear. girls did not wear lipstick until they were 25. ?hat stock to i buy> >> here's what the shopper is

thinking about, all the basics i have to get. has a unique reason for me to spend more. otherwise, it is just, all bets are off. i do not mean to sound vague, it is the consumer mindset. the cheapest or the newest, nothing in between. curious about technology. you said that is a big part of back-to-school shopping. was in1990's when i college, you got one computer when you're a freshman in college and that is how it was bought. what is the lifecycle? how early in the school career are you buying computers for kids and how often are they being replaced? depends on schools. in some schools, they provide computers. kids are using computers very early. i do not know american school systems -- >> lucky you. >> right? cookuld you suggest to mr. at apple that his fall product rollout should occur august 15?

>> it does. emails that say if you buy a computer or laptop you get a discount for back-to-school. >> if you are a student, you get a discount right now on applicants. -- on apple goods. tech accessories to go with it. younger age, people starting to buy, parents starting to buy and then replenishing. >> how's gap? >> slow and steady. >> they have a new person in charge of merchandising. new creative designer. >> so much competition. they have got it level, people are going back into the stores. i keep saying basics. not that one i must go and get it right now. >> next time, wendy liebmann will be with us on school uniforms. you want to get a debate going? talk about school uniforms. >> our twitter question of the day. what images are most important for global business?

you need to speak portuguese or chinese to work at the gap. chinese when you work at chanel. >> math. >> math? tweet us @bsurveillance. are growing at central banks, not at the ecb. the single best chart. ♪

good morning, bloomberg "surveillance" from new york city. i am tom keene, scarlet fu and brendan greeley. adam johnson is on assignment. scarlet gets us started with top headlines. russia's president vladimir putin retaliating against sanctions over ukraine. russia will ban food imports for one year. among the products, all dairy cheese and fish from the u.s. and eu. the truce in gaza in its third day. negotiators and cairo are trying to extend it. israeli diplomats are not meeting face to face with palestinians, they are going through the egyptians. d to thents an en israeli blockade, israel wants gaza demilitarize. tiger woods is back at the pga

tournament. 6 years since tiger woods won a major tournament. golf suffers because of it, the ratings go down he is not there. >> interesting. an interesting single best chart. the news flow is important. >> both the ecb and bank of england make right decision today. showsngle best chart the balance sheet of the four biggest central banks in the world. now."e all qe-sians it will bank enters qe, take longer to shrink its balance sheet. ecb's greenline, shrinking fast by over $1.3 billion since 2012.

given the data we have seen, and the yield performance on the german tenure and two-year, maybe that changes. calculus is the slope of the blue line, up, up, and away. bundesbankine is a influenced draghi. >> there was a paper by the bank of japan that distinguished between pure qe, just including the balance sheet, and conference of easing -- com prehensive easing, the balance sheet and bad assets. line, they vacuumed up a lot of bad assets, now they are done. >> there are real disagreements. jonathan ferro is going to come on, blah, blah. draghi has to answer for italy's recession given that green --

bring the chart again. given the green line. what's not in this picture? >> i think that is "sesame street." mario draghi has been effective in not putting up a lot of money, he has been doing it in words. whatever it takes to save the euro. >> we keep asking mario draghi for a solution because monetary policy is the only policy going. we should be asking the heads of state to get together and figure out some sort of stimulus. they have a fiscal problem, not a monetary problem. >> from your time in brussels, is this a bundesbank-influenced dialogue? >> absolutely. there is this sort of jockeying for position over who gets to be president of the commission. >> it is baloney. thank you! angela merkel is the president of europe. everybody looks to her. germany's problem within europe is that it will not recognize

the authority it has. >> it holds the key to photos, brendan greeley. get him un-fired up about the bundesbank. >> a picture of a -- >> cool! >> a comet. the picture was taken by a european spacecraft. very important. the contractor on that with airbus. an airbus photo. u.s. instruments on it. 10 years ago, it left us. >> a great quote from the european space agency, "ten years we have been in the car waiting to get into scientific disneyland." >> this is original stuff. it goes to the triumph of cassini and saturn. 250 million miles away. >> it will put a lander on the,, drill -- a lander on the comet, drill in, bring stuff home.

onon trend, metallic is trend. >> second photo, this is a picture of buddhist monks cleaning the dust off of a 15 meter high great buddha in japa n. part of the preparation for a festive period of bon. buddhists welcome the spirits of their ancestors. >> that looks like our make up team on me. >> this one makes me happy, surfing in cornwall. the sun going down over the western atlantic in wales. part of a board masters surfing competition that has been going on since 1981. in england. >> makes me feel homesick for australian. >> is the water cold enough so

they don't have to worry about sharks? >> they are wearing bodysuits. >> we have an australian on set. where do they worry about sharks? >> australia. >> serious. >> hawaii, as well. it has become worse with the globaln quote warming. oncan you comment australian unemployment? >> brendan talk little bit about the carbon tax laws. that is the only major thing that has had an impact of late. i cannot put those things together for you guys. >> explained rick springfield. >> does anybody remember rick springfield? it is only us. >> we all know rick springfield. >> scary.

>> cultural communications here. when we return, how companies can communicate culturally to strengthen international ties. it is a link there. that brings us to our twitter question of the day, what languages are most important for global business? tom says math, i go with mandarin. >> i am learning pidgin portuguese. >> ok, tweet us @bsurveillance. ♪

>> this is bloomberg "surveillance." i am scarlet fu come here with tom keene and brendan greeley. adam johnson is on assignment. let's get you company news from the files of "bloomberg west." google and barnes & noble taking on amazon according to "the new york times." book buyers in several cities can get same-day deliveries from their local barnes & noble through google shopping express. that will help or may help barnes & noble offset a slump at brick-and-mortar stores. the bigs computer security seeinge maker says it is growing demand for anti-hacking programs. symantec beat estimates, searching for a current replacement for the ceo, who was

fired in may. foursquare has read in its flagship app two-putt the location search front and center. the check and feature has faded in popularity, trying to attract more users and advertisers. the ceo says the updated app lets users find updated restaurants -- find nearby restaurants and businesses. >> a "surveillance" anglo-saxons do not think like asians. >> are you looking at me? >> those from london think explicitly, those from taipei think implicitly. are you confused? one of the most talked about books and industrial economics. "the culture map." front and center on the cover of the book. africa, a huge thing for president obama.

i was thunderstruck by the differences across africa in cultures. give us one example of the challenges you have when you do business in africa. >> across africa, there are differences from one country to another. for example, between ghana next to eachright other, nigerians are more direct with negative feedback, ghanians are softer. africa as a whole, africans in general tend to defer to authority more than people in western countries. >> is it a colonial artifact -- finland, france, and belgium? people aree way raised in tribal environments. i worked with a kenyan manager who said when i was growing up, i was taught that i should defer to my older brother and my younger brother should defer to me. now i manage a danish company. ithas been managing danes,

is incredible. they do not care that i am the boss. they are challenging the and contradicting me. please remember that i am in charge here. this is a really big challenge for leaders today to figure out how to not just work in the or american way, to adapt to different styles. >> this is power distance that you write about. it seems like there is a universal scale stop when you go to a country, you need to know what power distance is. in south korea, it is very high. in the u.s., it is low. is this something you can look up on an index? >> there are a lot of other things you have to think about. simply, you set travel. maybe you are working with other countries over e-mail or telephone. you can fall into all sorts of trust. -- of traps.

have a tendency at the end of a telephone call to recap what we have said verbally and then put into writing what we have said. with indians, you do the same thing and they might think this person really does not trust me. >> it's an insult? >> it feels like a sign that you do not think they will follow through. if you are aware of these sometimes simple traps, you can make several adjustments and improve your effectiveness. >> let me bring a quote up here. scarlet and i love each other. >> we gaze lovingly. >>" showing how far apart we a -- a quote showing how far apart we are. >> i had a holistic thought pattern? i am chinese-american. there's a tension.

i took the quiz on your website, there are different interpretations of professionalism. everyone believes they are acting in the most professional manner possible. the way we interpret it has huge ramifications. >> for example, something simple like you need provide negative feedback to someone on your team. the most professional way to provide that feedback is different from one country to another. pride ourselves on being blunt. it is true in comparison to asian countries or latin america we tend to be more direct. i have lived in france for 15 years -- >> my deepest sympathies. what's the difference there? >> in france, people are more implicit with positive feedback. they give negative feedback much more directly than we do. immelt cannot -- jeff will be comfortable. .k., they never give

you negative feedback, you have to read what is less positive and slightly negative. >> culture is relative, the way you experience the british is the way the french experience the americans. i worked with a french manager, his american boss called him into his office to tell his performance was on acceptable. -- was unacceptable. he did it in the american way by saying these are things i appreciate about your work. the french person was not even listening by the time he got to his real message. >> "the culture map," erin meyer. wendy liebmann as well. >> tom is going to go to gap. bag. will buy a "frozen" >> will images are most important for global business? tweet us @bsurveillance. you could be speaking in glitch but if you are african or damage it is a different story. we go to the>>

bank of england and then the ecb. euro 1.33, yen stronger, 1.02, ruvell above 36. >> robert kaplan joins us next on "surveillance." ♪

>> this is bloomberg "surveillance."

>> the german two-year moves to negative. considers $17han billion of punishment. south dakota is not north dakota, living in the shadow of the american oil boom. this is bloomberg "surveillance," live from new york. i am tom august 7, keene. joining me are scarlet fu and brendan greeley. is on assignment. our guest host, robert kaplan of harvard business school. let's get to our morning brief. germany this morning. >> overnight, german industrial output grew less than forecast june, after disappointing factory orders. australia's jobless rate at a 12 year high, six point 4%. surpassing the u.s. unemployment rate for the first time since 2007. economic data here in the u.s., weekly jobless claims at 8:30

a.m. 9:45, the bloomberg consumer comfort index for consumer credit for june at 3:00 p.m. earnings before the bell, wendy's, duke energy, amc networks. after the close, news corporation, the old media properties -- "the wall street journal." cbs, lions gate, and solarcity. news in europe. bank of england coming out with its interest rate decision. he keeps interest rates on hold at .5%. boe holding his asset purchase program at 375 billion pounds stopped no change. ecb comes out with its m., marioent at 7:45 a. draghi's press conference at 8:30. i would suggest if there has been a bit of a change in the u k, everybody is in love with the

success of the u.k. some economists are pushing back against what is going on in the u.k. it may not be as good as we have been led to believe. being abler of ever to make a decision at the austerity experiments. he didn't take so long to take hold. by the time the cycle is completed, everybody has their argument in place. >> a quick data check. equities, bonds, currencies, commodities. u.s.-centric. .3377, not much bounds of the boe announcement. 10 year yield, 2.45%. german yield, 1.09%. company news this morning. >> bank of america close to a record settlement in its mortgage backed securities case. according to a person familiar with the matter, bank of america would pay up to $70 billion. -- $17 billion.

the government warned it would not settle.ank did apple's decision to scale back a patent fight with samsung might be a change in strategy. the two decided to drop patent litigation outside the u.s.. apple has gotten virtually nothing out of the lawsuit so far. apple claims samsung copy iphone patents. rupert murdoch making it clear 21st century fox's decision to drop a $75 billion takeover for time warner is "resolute." saying fox does not need to hunt for acquisitions. he spoke after fox reported quarterly profit that beat estimates. overnight, the shot and out of a two-year, not 10 year, two year negative yield. carl weinberg has nailed the call on persistent low interest rates in europe. good morning. how much of this is induced by vladimir putin? when you look at the greater

economics mr. mario draghi has to deal with, is attention by ukraine and russia -- is it tinged by ukraine and russia? a at the margins, this was one basis point move. interest rate expectations are at zero. the yield has- moved 25 basis points at four years. noise around zero. >> when you look at troubled banks and the troubled europe, which is more important to the logjam that is european finance right now? the banksow, it is rather than ukraine that are holding things down. the ukraine is more of a longer-term problem. everybody is very worried about the imminent asset policy review and stress tests. nobody knows who is going to pass. banks are not lending on the basis of capital advocacy concerns. >> we've been hearing concern out of germany out about the possibility of addressing youth

unemployment. i'll be a change in european policy. what trigger is going to make them abandon the berlin model of how to handle the euro crisis? what will change their mind? >> i don't think anything will change their minds. a lot of people for their forecast base it on the idea that germany is certainly going to change. they are not. i forecast is based on the notion that we will see more of ctioname, and action -- ina on banking and depression in europe. with billonversation gross last week, he brought up the idea that there were helmets of a liquidity crisis. a set of separate events coalescing into a lack of trust in the greater european financial system. when you see it early in, negative yields this morning. is bill gross onto something? is ae world in general mess. there is a lot of trouble. foreign policy is not addressing

the problems. if you are an investor and you have a choice, that is what investing is about, you want to look at places that are making better policy decisions. north america and asia. the euro is flawed as a currency. not that the emu is going to fall apart, but the currency will cheapen as investors lose interest. carl weinberg with high frequency economics. as we go to the mario draghi press conference at 8:30, we will have that for you. it gets fiery at about 8:45. >> after the prepared statement. >> it is fascinating to see the headlines. onwe will be covering that bloomberg "surveillance" and bloomberg television. another top story we are washing. bank of america getting closer to reaching a settlement with the justice department. the justice department had been seeking $17 billion. overnight, it has made an abrupt about-face. we bring in our guest host,

robert kaplan of harvard business school. brian moynihan leads the way. they have been stubborn and not getting into the $17 billion number. it seems like they are all of a sudden. is he an adequate leader for this kind of situation? has a good background with his legal background for this situation. they want to move to put this behind them. also, they have so many government entities who are regulating them, i think you want to be on good terms with the government. you want to get these things behind them. they are well preserved. you will see the stock react positively to this. and so, i think they want to do what other banks have done, keep moving forward and get this behind them. >> keep moving forward. a lot of people questioned once this is done, the focus goes back to operationally what the bank can do. in this kind of environment, with the legal overhang and capital requirements that are now being put upon by regulators, where is this growth prospect?

what can brian moynihan do to change the trajectory of think of america? focused one been operating improvements. back to europe, we have a global age in the western world, a massive deleveraging, particularly in europe. it creates sluggishness for gnp growth. he is dealing with low interest rates, the yield curve is fairly flat. the net interest margin, therefore, in the western world is more challenged. they are trying to work through that. >> you say they are adequately reserved. bank of america, j.p. morgan, citigroup. number of days compared to operating income. >> j.p. morgan paid $13 lien, citigroup paid seven dollars lien. >> shows scope and scale. >> i'm curious about ongoing cultural change in largest banks. yesterday we saw the fdic and the fed say your plans for the wind down are not sufficient. you are going to have to make some changes.

real, aggressive regulation. no, you cannot just say something. you have got to fix it. >> that is more about a cultural change with the regulators than the bank. sendinglators are a message, take us seriously or we will push back. >> are bank going to have to change? it.hey've been doing if you sit in bank boardrooms when the fed comes in, the tone is very different. the banks are working very hard adequacy,r capital the living wills, the resolution authority. toy are dramatically working improve everything they do. the regulars are being very tough. >> do you think this is moving down the chain? they are saying within the company we have to make this change? >> definitely. you look at how many compliance people jpmorgan has hired. ucf seen -- you seen the headlines, banks are taking this seriously. >> this is something we will

continue to discuss as we wait for bofa to make an announcement. bloomberg is reporting now anywhere between $16 to $17 billion. >> a lot of money. >> our twitter question of the day, what languages are most important for global business? for brian monahan at bank of america. tweet us @bsurveillance. coming up on "surveillance, what is to blame for the recent pullback in m&a? adulation or failed deals -- r u deals.n or failed >> russian ♪

>> good morning, bloomberg "surveillance. futures. this is bloomberg "surveillance," i am tom keene. scarlet fu and brendan greeley with me. it is a merger that sort of kind of may -- >> for now it is not happening. fox pulling a $75 billion bid for time warner. the gargantuan m&a deal. jeff just -- after bewkes refused to engage.

>> is not a victory lap. it is hard for me to see how fox, with the strategy, was going to successfully take over, do a hostile takeover of time warner. they're both about $75 billion. time warner is probably a better content creator, which is the critical element you need today. better than fox. there was not anything compelling for time warner to say yes to. >> there was this idea that they were going to be back off savings. they identified $1 billion, not significant enough to make this compelling. >> do you teach synergy in your class? tell me you do not. do you let the word into your class? >> you try to figure out what you do that is distinctive on the revenue and cost side. there was not anything distinctive fox was offering. you cannot pay a

big premium on price if you're the same market cap as the folks you're trying to take over/ >> did rupert murdoch mis-play this? >> maybe. i did not understand the tactics or announcing basically a bear hug. they probably should have talked to time warner privately and see if they can do something friendly. to go out in such a public way with a deal that was tough to do, i don't understand. >> culture matters. you can look at the financials of a deal and say maybe we can swing this. they are two different companies, that is not insignificant. >> culture does matter. you're not off to a good start if you announce an unsolicited offer publicly. you're better off working privately and seeing if cultural you can work together. ' first is jeff bewkes priority now that the storm is over? >> keep operating the company. tbs, tnt, hbo our great content providers. you might see them do content

acquisitions. keep moving along. the board of time warner looked at their five-year forecast and said we prefer to be alone than do this merger. >> we are killing it, is what they found out. >> robert kaplan of harvard business school. >> coming up, [speaking french] language, the new transnational corporation and the importance of language. we will do that next. what languages are most important for global business? ♪

>> good morning, bloomberg "surveillance." scarlet fu and brendan greeley with us. adam johnson in on assignment. our guest host is robert kaplan, a professor at harvard business school. he studies and thinks about leadership, particularly among transactional wall street. our top headlines. nsahe fugitive former contractor edward snowden is saying in russia. his lawyers say russia has given

snowden three more years of asylum. snowden fled there after revealing top-secret nsa programs that collect the data. vladimirpresident putin retaliating for u.s. and european sanctions over ukraine. russia will ban billions of dollars of food imports for one year, cheese and fish from the u.s. and eu. in cambodia, senior leaders of the khmer rouge sentence to life for war crimes during the 1970's. blame for killing close to 2 million people after touring the countryside into killing fields. marking the first time that top officials have been punished. those are your top headlines. >> fascinating. we wait for the ecb decision in about 25 minutes. february cannot come soon enough for the m&a elite of wall street, bonus season. 2014 is shaping up, yeah, banner year. cohead of mergers and acquisitions at morgan stanley. something has happened.

february, "game of thrones," "winter is coming." are they related, m&a, enthusiasm, and excitement? a couple deals have troubles. >> the demise of the m&a market is overstated. we see a very healthy m&a market. i would say that some of these deals not happening are a sign of the health. >> why? >> strategic's are stepping up and going after dream deals. a wise man once told me every m&a deal has to fall apart three times before gets done. we are seeing people engage in, often in the public, and trying to transact. the bread and the death of the m&a -- the breadth and the depth of the m&a is strong. >> your point about strategic buyers, we have not seen as much

buyers from private equity firms, it is almost as if they've been squeezed out. >> actually, private equity is still a germanic part of the market.1/6 of the m&a the headlines are crowding out the fact that the sponsor volumes have grown. whether they are seeing difficulty, some of these big deals in the public markets for the equity market is run. >> walgreen yesterday chose to not pursue a tax inversion after completing the purchase of alliance foods. have we reached a tipping point with tax inversion? >> if you look at all the deals in the market, 300 at over $1 billion. 2% were in versions, this is not the tailwagging the dog. walgreen-alliance food, the board was circumspect about whether there was an opportunity to do this. situationing to be a

where some will try in versions, others will be conscious, it is not to drive the m&a market. >> you are a philosopher, you have to knock on the door three times before they open it? do we get this wrong, do we jump on failed attempts too quickly to pronounce the death of a deal? >> what is new in this market, it is because of the activists and a little bit more aggressive behaviors, playing out in the press. some deals take years to publish. ,f you look at verizon wireless that took 10 years. the fact that these are playing out in the public has the notable aspect. >> we need something to say every day. agree with robert kaplan that fox was too public, too soon, it should have taken a cautious, sydor approach? >> one never knows what goes on between the parties. we are seeing a lot more public advances -- >> you dodged that like a pro. >> we advise on a lot of

transactions. in this environment, everybody wants scale. especially when the economy is struggling to get past 3% growth. the deal that fell apart yesterday involved regulatory hurdles. what does that tell you about the state of isolation? -- state of regulation? >> in the low growth environment, the need to consolidate and restructure markets is there. acquirers are going to press regulators to the edge to figure out what kind of deals can get done. >> i need to ask you about james gorman. you have a young kid at morgan stanley out of indiana ucla fory, went to business school like someone i know. you had to give him a raise. gorman you and mr. advanced the compensation of junior employees at morgan stanley? >> we intend to create careers and keep talent. it is a competitive advantage.

we are using the tools in our toolkit to make sure we are providing opportunities. experiment of delayed conversation and bonus, three or four or five years out, is that a field experience? i know you will not,, is that field for all of wall street -- i know you will not comment, is that failed for all of wall street? >> the regulators will make this common. >> comment on that? >> i think different compensation is here to stay. insisting ons are it. it is still a great place to go. i was there for 23 years. for young people if you look markets, it is a great experience. it is a great career. they are more highly regulated. if you love the markets, is a great place to work. >> jim head with morgan stanley. >> coming up, the oil boom in north dakota drawing lots of

money. what is it going to the states neighbors? we are joined by the governor of south dakota, next, after the break. this is bloomberg "surveillance." streaming on your tablet, smartphone, and bloomberg.com. ♪

>> this is bloomberg "surveillance," i am scarlet fit with tom keene and brendan greeley. adam johnson is on assignment. some company news headlines. boeing wnaants to cash in on aviation junk yards.

the company may be in the market for a company that salvages parts. nestlé will spend nine billion dollars buying back shares, the first in three years. the maker of kick cap bars reported sales growth that beat estimates. has lost a battle to new york's explorers club. a judge ruled diageo must stop selling a brand of scotch called "johnnie walker's explorers club," after an unsanctioned association with the club. former members include teddy roosevelt and neil armstrong. time for this matters now. tom? >> this matters now to our guest robert kaplan, harvard business school. how about [speaking french] get in line. corporations cannot afford the ugly american luxury anymore. they need language strategy.

this is a brilliant article in harvard business review. thank you so much for this article. >> also had a co-author, a brilliant professor at harvard. >> why do i care about linkages, everybody sticks english. >> most global companies probably have 35 languages speaking in the company. they need a shared language. it has a big impact on your ability to run your business globally, and certain local markets, develop your strategy and most importantly to keep, develop, and evaluate talent. >> your younger talent, everybody speaks english. locally,t companies, they probably speak the local language. when they get better for execs,s or speaking to they speaking was. is, can. read, learning to write, learning to order a pizza or do you have to become fluent?

>> for local employees it is about training your people in japan or italy to speak to some sufficient amount of english. and then it is making sure that you, that ex-pats that are there evaluate local talent accurately as opposed to people who speak that are english and communicate better. you have to avoid that trap. your article,f you push aside this idiocy that you're going to learn a language in your spare time. you say learned the language on company time. that is the heart of the discussion. >> the company needs to have a strategy for helping you do it so that you can learn the shared language. you can make sure that we hire the best talent locally as opposed to who speaks the best english in a local country. you want to be able to train people so you get the best talent. >> does rosetta stone work? what does the u.s. military do, what is the method? >> there are lots of methods that work.

when i was sent to asia, i had to learn japanese. lots of ways the company -- >> how did you learn? >> i took a course, it was not all that effective. when i got there, everyday as i walked around, i was in charge of the business. people were speaking japanese, i do not know what they were saying that they had to communicate with me. when they went to a japanese client, they had to speak japanese. >> i would love to know from your children, your grandchildren, what is the language robert kaplan would say is the one to learn? spanish,grew up, it was french, or german. mandarin is in. >> is great to learn mandarin. >> really? >> yeah. a consecutive language to learn, very challenging. >> could enjoy some? ma, that's about as far as you will get with me. >> a fabulous article. how do you bring this down from easy multinationals down to

smaller companies that need to effect a language? >> i was having dinner last night with a general manager in the national basketball association who read this article and has this issue. they go for talent all over the world. the key is to recognize it as an issue, the sensitive to it, and factor it into your strategy. do not assume it is going to happen without your direction. you need to have a strategy, it has to be explicit. that is the key message of this article. >> [speaking french] i cannot do the tease in french. i'm killing this. back to scarlet fu with a data check. >> how do you say bloomberg "surveillance" in french? bloomberg!e du 45.ec announcement at 7: euro 1.3381.

the changes expected at the ecb meeting. >> no changes expected in europe. 1919.ures higher, up 4 at this is bloomberg "surveillance," on bloomberg television, radio, streaming on your tablet come your smartphone, and bloomberg.com. i am scarlet fit with tom keene greeley.an adam johnson is on assignment. our guest host is robert kaplan, professor at harvard business school. let's get you some type headlines. itstruce in gaza is in third day. negotiators in cairo are trying to extend it. israeli diplomats are not meeting face to face with palestinians, they are going through egyptians. end to the an israeli blockade, israel wants all of gaza demilitarize. most of the 30 million american to lack health care will not pay a fine under the of care act in 2015. % will avoid penalties due to

a list of exemptions including domestic violence, property damage from a fire or flood, and having a canceled insurance plan. tiger woods is back in action at the pga championship in kentucky. woods withdrew from a tournament four days ago because of back pain. six years since tiger woods won a major turnout. those in the top headlines. >> dakota is not dakota. ibaka in jail -- the bakken shale boom. sioux falls south dakota is a finance capital. we are joined by dennis daugaard , governor of south dakota. what is the good news? with businessing is headquartered here but have presences in south dakota, talking about the possibility of expanding their facilities there or adding a new one. things are looking good.

net inflow ofas a population for the last 10 years. this is important. if not with shale, what is the way you grow a state? >> we have a pretty diverse economy. agriculture is a strong sector. thanks to citibank's move to we have as in 1981, strong financial services sector. we should have about half of what we have proportionally, we have about what twice the national average would be for a place of her size. we have advanced manufacturing nation has lost manufacturing jobs, we have gained them. >> one of the most important books i've ever read was on the peopling of north america. you people are a triumph to the recompilation of the midwest. -- of the repopulation of the midwest. there was a population declining you have reversed that. try toh dakota has

maintain a business friendly environment. no personal or business income tax -- no personal or corporate income tax. >> you're kidding. >> i'm not. we have a low-cost structure. if you look at moody or the department of commerce's announces that enter into the cost of living or business, whether real estate or utilities or labor, south dakota's costs are always near or at the bottom. earn income but you do not have to spend a lot on taxes. what you do bring home, you can buy a lot. >> one of the other growth industries for south dakota is providing equipment and material to the north. is it good to be not in a boom but near a boom? >> it is. we had a couple pipeline companies move into south dakota. alaska modular building company moved to south dakota, intent on serving the

to locate preferring and south dakota where labor costs are not as competitive. political about the clarity of south dakota. republicans and democrats can speak to each other? >> we do pretty well. people treat each other with civility. >> what's your prescription with washington? >> treat each other with civility. >> good luck. >> can you stop by d.c.? at the work ofk south dakota, what is your to do list? and thethe academics agriculture, what is your five year plan for south dakota? is to getimportant the word out about south dakota as a business climate. people do not know that we are one of the few states that has no income tax. they do not realize what a low-cost structure we have. qualityy understand the

of our workforce and the productivity of our labor, you can earn, our regulatory environment is good -- >> thank you, tom is planning on moving to sioux falls. willoomberg "surveillance" be right back. tom, brendan, and i. ♪

>> good morning, bloomberg "surveillance."

england and ecb developments. ecb and ecb developments. ecb in a bit. bloomberg television, ralph schlosstein, ceo at ever core. an important interview as he and mr. altman purchase isi. intellectual content of wall street. ralph schlosstein on buying intellectual content firm on the " with bettythe loop liu. speaking with the republican governor of the state of south dakota, dennis daugaard is with us. i want to talk about your party. is there a moderate wing of the party? or is it vaporized at the moment? >> there is a breath of -- there opinion.dth of people with extreme views are often noticed more. there is a breadth of attitudes. go to the 2014

elections and the convention, what can be the dialog to coalesce the republican party to get the middle ground? the people they lost in the last presidential election. >> the focus on fiscal matters is important. >> back to traditional budget policies? >> i think it is an area where we need to focus. south dakota has made some hard choices along the way. we had some falloff in revenue as a consequence of the recession. we cut our expenses down to where our revenue had fallen, balanced the budget and have had surpluses for the last three years in a row. one of the things we have learned from texts of the last decade, they had to learn it is not just about taxes. it is also about amenities and infrastructure. what does south dakota have yet to do to make that infrastructure ready to attract business? areike all states, we concerned about highway funding. the federal government highway trust fund is near bankruptcy.

we have a short-term fix in place through may. all states depend upon the federal highway trust fund to some degree. that is infrastructure, certainly important. >> what about internet access? high-speed fiber? >> we have fiber at the end of my driveway. >> congratulations. we were talking off-camera about how the state does not have an income tax but you do rely on the sales tax. is there a lesson for other states in shifting to a sales tax? tax, itconsumption encourages people to save and be responsible. it does not penalize those who are successful. >> we will continue with the governor from south dakota. europe, negative term interest rate. more attention paid on the ecb. we await that decision, joining us is jonathan ferro. this 8:30 press conference

becomes more important. for three reasons. one, the data out of your is weak. not just italian recession or great deflation. weak german data. to banco espirito santo, the question will be put, is a concern about the speed in which one of the biggest banks in portugal failed? russia, how do you deal with the russian issue? >> we talked to carl weinberg earlier about that, it is o verlay. here we come with the headlines are the ecb. and much by rote. >> unchanged. we expected unchanged, it is about what happens next and the pressure building on him to do more. that question will be put to him. you have an asset purchase plan, when is it coming? inflation in the euro zone has dropped to 0.4%. that is a concern. >> how powerful is the bundesba

nk in fronankfort? how much sway do they have? >> they have atrophic amount of power. the difference is the weaker data is starting to filter through into their own industries. that is something they have got to deal with. one of the reasons you have seen the bundesbank almost capitulate over the need for more qe. in the bond market, i know what , yieldsg in bunds at record lows. spain went to market, issue 10 year debt at record low yields. lowerrket is pricing in inflation, some might say it is pricing in deflation. >> bundesbank, capitulate, not words you hear in the same sentence. we always talk about monetary policy because it is the only game in europe. is there any sense that anything

will drive the german government to take a different fiscal stance towards the rest of the continent? >> europe has a big current account surplus. that is largely because germany exports way more than they import. i have heard them described a shots atr dealer that the dollar store. they have got to spend more and drive growth. you've got to sit and ask the question, they have got their house in order, is it their job to drive the euro zone growth? or do they wait until the point where they have no choice? >> jonathan ferro with a by rote ecb decision. that will change at 8:30 and 8:40. >> when mario draghi starts talking x denver initially -- starts talking extemporaneously. 1.3377. low versus the dollar. s&p futures up.

10 year yield at 2.45%. $96.96.ude below $97, a little changed from the day before. >> good morning, this is bloomberg "surveillance." i am tom keene. with me, scarlet fu and brendan greeley. adam johnson is on assignment. our guest host from harvard business school, robert kaplan. we bring you the republican governor of the state of south dakota, dennis daugaard is with us as well. right now, company news. excuse me, your breaking this. >> the headlines on the european central bank. interest rate decision, no change, they have kept the benchmark rate at 0.15%. deposit facility rate is unchanged at -0.5%. in line with what economists had

been looking for. the bank of england kept it asset program unchanged. >> we will go to the european press conference. robert kaplan and dennis daugaard, do you want to talk about the manufacturing renaissance? governor, you mentioned low taxes, a good fiscal policy, you need an entrepreneur and initiative. is washington and the way? >> to the extent that it provides uncertainty to the business sector is in the way. in south dakota at the state level, we deal with uncertainty after uncertainty. will the stimulus affect our economy? will the sequester take place? will the government shutdown, then it shuts down, all the things create uncertainty. business need certainty. 50 states withn,

50 different stories. it is incredibly important, state policy as well as what we talk about, 99% of the time, the beltway. >> this is, despite some of these issues, it is an extraordinarily good time for entrepreneurship and business formation. capital is powerful. the risk-taking culture is alive and well. >> texas is not new jersey. >> state matters happen on the margin. centers of entrepreneurship in some of the states, like texas, california, they are popping up in other places. in massachusetts. that may matter more. i think states like south dakota, in trying to create a pro-business, business friendly environment, that is critical. >> governor, we talk a lot here about what makes a city work. we are obsessed with bike lanes. what does it take in sioux falls

. are you using sioux falls to drive the economy of the state? >> sioux falls is a major factor in south dakota. the sioux falls business community is intent on good business climate and inviting more business to south dakota. >> what is that mean? what is a good climate other than taxes? >> taxes, low cost structure, it is having your government be available to not obstruct advancement. to have a regulatory climate that is reasonable. tingwant to have permit that is prompt and efficient. regulations not with a "gotcha" attitude, but helping businesses comply with modest regulations. >> it is five hours 16 minutes from sioux falls tomorrow sure? -- to mount rushmore? i had no idea. when you are out there talking

to the people between sioux falls and mount rushmore, what are you talking about? >> worked at, -- work ethic. people are very upbeat in sioux falls and the state. income in the last 10 years has moved from the bottom have to the top half. we're in the teens as far as right per capita income. thingsubtract taxes, buy that cost less, you have a good quality of life. >> a couple kids out of south dakota going to harvard. the smartest kids on the block. it is great, the diversity there. >> one thing the governor said that i like it, the ability to talk to the government and have a constructive dialogue is critical. i think most smart governors in this country realize that. you've got to be able to talk to people. >> not just adversarial.

>> it has got to be constructive. it helps a state to foster business. >> i will zero in on a detail. you said there was fiber to your house? who laid that? was that a government initiative or from verizon? >> that was a telephone co-op. we've had initiatives over the last five years to extend fiber into lots of rural south dakota. that is challenged by the federal government's modification of -- some of the federal support to rural telephone. also providing rural broadband. the government now is being sucked away for other things. know itast question, i is a republican answer. which president should be the next president on mount rushmore? >> not going there. >> it is a government-funded project. come on. president reagan?

>> i like the four we have. [laughter] my grandson, who is two years old, can name each one. >> let's get to our twitter question of the day. what languages are most important for global business? with robert kaplan here. here are some answers. "english, french, arabic." #landofopportunities. >> arabic, i tried it. >> how did that go? >> not well. margaret brennan at cbs, her arabic is beautiful. >> they make sounds you were not designed to make. "english works at some level everywhere." >> you pushed against that. you are an but if english down the company, you

have got to foster local make peopled not feel like second-class citizens if english is not their first language. >> "language of love." >> did you send this in, brandon? >> not guilty. >> this sounds like something very reynolds would do. >> my only foreign languages german. no one has ever accused it of being the language of love. love ♪e, love, >> let's get to our agenda. >> negative interest rate, it was a shock to anybody to see what is going on in europe. i go back to the bill gross comments. he talked about not one big event, but a sequence of events to financial tension. we are not there yet, but in the last four or five days,

including the negative interest rate. a.m., starts getting interest at 8:45. of america, getting close to reaching a settlement with the u.s. apartment of justice. $17 billion is what the government wants. bank of america is negotiating in the $16 billion range. a capitulation of the last four hours. >> why do i believe this is not the end? >> can we come up with a way for someone to pay other than shareholders? i want to see someone take personal responsibility instead of passing the but. buck.sing the >> i am watching to see the recovery of the doctor at emory hospital. if that works, the fda and cdc

have a lot to do immediately on this drug. the state department has to make decisions on how they are going to handle it. we have a promising treatment that has a lot of work to do to get approved by the fda. a lot of exceptions are being made to pharma rules. >> mapp pharmaceutical. contract with the defense agency. emotion, we should mention the church of these people. they have the fancy clothing, there is a certain amount of courage. >> to go over there and do that work, yes. >> thank you to robert kaplan of harvard. the beststen to songwriter ever from south dakota. governor daugaard, thank you. >> coming up tomorrow, with the

dow industrial halfway to eight correction. jason trennert with his analysis and insight on the equity markets. have a great morning. ♪

>> good morning. it is thursday, august 7. we are live from bloomberg world headquarters. you are "in the loop," and i am betty liu.

our guest will talk about his acquisition of the research powerhouse isi. ralph schlosstein, ceo of evercore partners. week'sject of this "bloomberg businessweek" rubber story.- cover bank of america close to paying a record amount to end an investigation into mortgage bank bonds sales. keepingpean social bank interest rates at record lows. there is concern of the crisis -- vladimirerailing putin has retaliated for the u.s. and european union sanctions. russia is banning a wide range of american and european food imports. t